EPA likes clouds – as long as they're Microsoft's

Microsoft's ongoing fight to transfer its lucrative government business from software to the cloud has received a major boost with a deal to sell 25,000 Office 365 licenses to the Environmental Protection Agency.

The $9.8m contract to supply the EPA with cloudy applications for the next four years was won by Microsoft reseller Lockheed Martin. The EPA says it expects to save $12m with the deal, as well as reducing its carbon footprint by saving on power and resources.

"Lockheed Martin has supported the IT needs of the EPA for more than 35 years," said Frank Armijo, vice president of Lockheed Martin Energy Solutions in a statement. "By providing cloud-based tools that facilitate collaboration, communication and cost savings across the agency, our team is dedicated to the EPA's mission."

Early in the Obama administration, the government declared that it was looking to consolidate its data centers and shift most of its user base onto cloud services. This left Microsoft with something of a quandary, since the US government has traditionally been one of the biggest buyers of its software.

Redmond started to push the Office 365 platform at its government customers, and began winning contracts immediately. But Google too smelled an opportunity, and started touting its Apps service to government agencies, and found early takers such as the city of Los Angeles.

But Google faced significant problems, as seen by the fight for the contract to supply cloud services to the Department of the Interior. Google pitched for the contract but lost out to Microsoft, then sued when it learned that the DOI contract had been written to exclude anyone else but Redmond from winning.

After two years and a series of bitter battles, both in and out of court, Google Apps got the final DOI contract for a cost of $35m as opposed to the $49m that Microsoft was offering. Future government contracts now look to be more open affairs, and the state is moving faster than ever before to adopt cloud services, Google told El Reg.

"We're incredibly excited by the momentum we've seen with Google Apps for Government, and honored to help so many government agencies across the country move to the cloud," said David Mihalchik, head of Google Apps for Government business development.

"Google is a proponent of open competition," he told us, "and we believe it's good for government: employees get the latest communication and collaboration tools while saving taxpayers millions of dollars a year." ®